Rail Budget 2013: Populism Or Pragmatism?

The rail budget by Bansal, the first by a Congressman in 17 years, is expected to mark a sharp departure from his predecessors like Mamata Banerjee and Lalu Prasad.

Railway minister Pawan Bansal spent a quiet day at Rail Bhawan on Monday, polishing his maiden budget that is almost certain to be guarded in its populism while leaning towards pragmatism and fiscal prudence.

The rail budget to be presented by Bansal, the first by a Congressman in 17 years, is expected to mark a sharp departure from his predecessors like Mamata Banerjee and Lalu Prasad who rode high on "populist" agendas.

There will be some attention on whether he bites the bullet on another fare hike, or leaves it for another day.

The railway budget will be seen as a precursor to the general budget to be presented on Thursday with political observers and economy watchers looking for reform signals on how Bansal addresses the challenge of mending the railways' failing finances.

The task of providing capital for expanding services by adding track so that the pressure of running passenger and freight trains on the same lines is reduced, improving passenger amenities and catering to the clamour for new trains and junctions will test Bansal.

Bansal is likely to focus on connecting more cities and towns surrounding urban and industrial centres with faster and comfortable trains, laying of new track to cater to power plants and enhancing passenger amenities like cleanliness.

Expenditure on new rail infrastructure is likely to be muted and there may not be many additions to the long list of "socially desirable but economically unviable" lines considering the transporter's tight fiscal situation.

The northern states, mainly Punjab, Rajasthan and Haryana, and northern Bengal are likely to be major beneficiaries when it comes to announcement of new trains, new lines, setting up of production units and inclusion of stations for upgrades under the Adarsh station scheme.

States such as Karnataka, Andhra Pradesh and Chhattisgarh which have agreed to bear land cost and 50% of the project cost are likely to find some favour.

The plan size is expected to see a moderate increase or will be around the same as the current fiscal's Rs 61,000 which was slashed twice and brought down to around Rs 51,000 crore.

Fare hike - both passenger & freight -- is imperative and it is only a matter of time. It will be interesting to watch whether Bansal announces a passenger fare hike in the budget, the second in his four-month tenure or chooses other ways to mobilize resources to restore the national transporter's fiscal health.

The minister had hiked passenger fares across the board on January 22 while saying it would not be revised in the budget.

In his budget speech, the minister is likely to talk about steps been taken to ensure safety of women passengers, including 24x7 helpline, cleanliness on stations and bio-toilets in trains, measures initiated to ensure better quality food and introducing Braille stickers in coaches for visually-challenged passengers.

Bansal may announced new AC double-decker trains and semi high-speed trains running at 160-200 kmph for inter-city travel.